[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN THE NETHERLANDS] 78
and will only continue if the obligation is disputed in the verification process. An important feature of Dutch bankruptcy is the possibility of a restart of (parts of) the debtor’s business. Debtor’s assets and operations can be (partially) sold by the insolvency administrator to a third party or to management. Such a deal is generally structured as an asset deal where debts and unnecessary contracts (including employment contracts) remain in the bankrupt estate. III. Suspension of payment The debtor who expects that he will be unable to continue paying its debts, can be granted a suspension of (moratorium on) payment. During the suspension of payment, only unsecured and non-preferential creditors are prohibited from enforcing their claim against the debtor’s assets. Creditors of secured claims (holders of right of pledge of mortgage) or preferential creditors (such as the Dutch Tax Authority, employees, or other creditors whose claim is preferential by law) can ignore the moratorium and can enforce their rights as if there was no moratorium. As a result of the granting of suspension of payment, as of 0:00 hours of the day on which the court grants suspension of payment, the debtor can only exercise its power of disposition and capacity in relation to its assets with the cooperation or authorization of the administrator. This is where the suspension of payments differs from a debtor in possession proceeding. Creditors of unsecured and non-preferential claims are prohibited from enforcing actions against the debtor’s assets and seizures made prior to the opening of the suspension of payments cease to exist. Additionally, the district court (and not the supervisory judge, as in bankruptcy) can issue a written order
( afkoelingsperiode ) stipulating that, for a stay period not exceeding two months, each right of third parties, including secured and preferential creditors and creditors to the suspension of payment estate, to enforce against the debtor’s assets or to claim assets under the control of the bankruptcy can only be exercised with his authorization. The supervisory court may extend this stay period once for a period of maximum two months. In contrast to a bankruptcy proceeding, pending lawsuits are not automatically suspended. A restart of the business can be structured during the suspension of payment by a partial sale of the debtor’s assets and operations. However, since the debtor is not bankrupt, contractual relationships remain in force, and stakeholders may still exercise certain rights, which can influence the success of a suspension of payment. It is therefore common in suspension of payment procedures to file for bankruptcy to have the possibility to keep unnecessary contracts out of the deal. IV. WHOA – the Dutch Scheme The WHOA is applicable for companies that are in a situation where it is to be expected that they cannot continue to pay their debts. The procedure can be filed by the debtor itself or by a creditor, a shareholder, the debtor’s work council, or the debtor’s workplace representation. When the WHOA is filed by anyone else than the debtor, a restructuring expert is automatically appointed by the District Court. A restructuring expert can also be requested when the debtor files for a WHOA. This is often done to give the restructuring plan more objectively. Upon filing, one can choose between a public and a confident variant of the procedure. The public WHOA is listed in Annex A of the Regulation (EU) 2015/848 on Insolvency
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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